The China Cuisine Association, the country's largest catering union, has established a New Retail Catering Commission to promote the use of internet, data and automation in a bid to digitize the 4-trillion-yuan ($595 billion) sector.

The nation's catering industry has multiplied 700 times in the past 40 years to hit around 4.2 trillion yuan in 2018, with the number of dining facilities jumping from fewer than 120,000 to over 4.65 million nationwide, said association head, Jiang Junxian, at a meeting in Shanghai.

The rate of digital adoption however remains at roughly 10 percent, lagging behind retail. The establishment of the commission is designed to promote the use of digital tools to improve the efficiency and quality of the industry, said Jiang.

Alibaba's local services platform, the combined Ele.me and Koubei, has proposed a plan to empower 1 million catering merchants to upgrade their digital solutions, help 1 million vendors to create online offerings, and create 1 million retail-related jobs this year.

"The so-called 'online traffic bonus' era has come to an end. Internet platforms need to provide merchants with the necessary tools to streamline their operations and predict customers' needs so as to spur sales," said Wang Lei, president of the platform.

Integrating warehouses with dining spaces is an emerging trend, where takeout kitchens double as restaurants and when data is applied effectively to monitor customer flow and manage online and offline orders in real time, said Wu Hao, CEO of Chomp Cloud, a provider of integrated online and offline catering solutions.

"With the fast-expansion commercial property development drawing to an end, we are also incorporating dining spaces into various scenarios, such as bookstores and convenient stores, which serve as a natural extension as dining spaces and therefore boost sales," Wu said.